Virgin agrees deal to use T-Mobile network for six more years

9/24/2008 12:21:00 PM
Virgin agrees deal to use T-Mobile network for six more years

Virgin Mobile is launching a range of data services for the first time in the run-up to Christmas on the back of a renegotiation of its wholesale deal with T-Mobile.

The new six-year deal signed in June covers HSDPA data speeds and will allow Virgin to sell mobile broadband dongles on prepay as well as 3G handsets.

The operator had been hampered by its inability to range 3G devices, and has also missed out on the mobile broadband market.

It is understood to be the biggest renegotiation and biggest wholesale MVNO deal over the last four years, which now stretches to 2014.

Virgin is understood to have been in discussions with T-Mobile’s rivals about the possibility of switching to another wholesale partner, but is believed to have secured better terms under its updated deal with T-Mobile.

There is greater appetite now among T-Mobile’s rivals to sign up wholesale deals, pushing down wholesale prices, and raising interest from T-Mobile’s rivals to muscle in on the Virgin deal.

The two companies have agreed on new terms, which are believed to be lower than Virgin had been paying. Virgin’s last renegotiation with T-Mobile was over five years ago following a bitter disagreement between the two parties.

One source close to Virgin said: ‘There is a better deal there for the Virgin guys. It has helped that T-Mobile has a 3G network now, but the biggest thing is that Virgin would have had a nightmare in switching to another network. It would involve all their existing customers having to put new Sims in.’

A spokesman at Virgin said: ‘We are very happy with our relationship with T-Mobile.’

A T-Mobile spokesman confirmed: ‘We signed a contract amendment with them back in June to include the provision of HSDPA services. We have a strong relationship with Virgin Mobile under a long-term contract.’